Paterson scrambles to avoid losing $2.5M in HUD funds

PATERSON – With the city in danger of losing another $2.5 million in federal housing funds at the end of July, officials are pushing a last-minute effort to allocate the money to two projects.

Officials said about $1.8 million would go towards the fourth phase of the Alexander Hamilton housing development, the construction of new homes at the site of what had been the notorious complex known as the Alabama projects.

Another $700,000 would go towards the New Jersey Community Development Corporation (NJCDC) and its plans to renovate an old church on Elm Street to create 14 units of affordable housing.

“I’m relieved that they’re doing something, losing the money would have been unfathomable,” said activist David Gilmore, an unsuccessful candidate in the May mayoral election. “The community needs all the help it can get. We can’t afford to lose these funds.”

Mayor Jose “Joey” Torres and his staff presented the council with its plans for the funding under the federal Home Investment Partnerships Program, known as HOME.

Officials said the Alexander Hamilton developer, Pennrose Properties, and NJCDC both had applied for the HOME funding more than six months ago. But officials said former mayor Jeffery Jones’ administration failed to act, putting the funding in jeopardy as the deadline approached.

During Jones’ stint as mayor, Paterson lost several million in federal housing grants, a problem he had blamed on problems he said he inherited from Torres. Jones could not be reached for comment for this story.

The HOME program is run by the United States Department of Housing and Urban Development (HUD). Normally, the city allocates HUD funds through a competitive process open to all applicants. But officials said the impending deadline required that the city fast-track the allocation.

“I’m hopeful that this is the last time that we find ourselves in this type of situation,” said Councilman Kenneth Morris.

Councilman Andre Sayegh said the tracks records of NJCDC and Pennrose made it easier for the governing body to push ahead with the plans.

The council plans to formally approve the funding at a meeting later this month.